The information content of mandatory risk factor disclosures in corporate filings

• 成果类型: Article
• 署名作者: Campbell, John L.; Chen, Hsinchun; Dhaliwal, Dan S.; Lu, Hsin-min; Steele, Logan B.
• 署名单位: University System of Georgia; University of Georgia; University of Arizona; University of Arizona; Korea University; National Taiwan University; University of Connecticut
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-013-9258-3
• 发表日期: 2014
• 页码: 396-455
• 关键词: capital-markets; cost; earnings; liquidity; LEVEL; sensitivity; volatility; statements; management; asymmetry

摘要

Beginning in 2005, the Securities and Exchange Commission (SEC) mandated firms to include a risk factor section in their Form 10-K to discuss the most significant factors that make the company speculative or risky. In this study, we examine the information content of this newly created section and offer two main results. First, we find that firms facing greater risk disclose more risk factors, and that the type of risk the firm faces determines whether it devotes a greater portion of its disclosures towards describing that risk type. That is, managers provide risk factor disclosures that meaningfully reflect the risks they face. Second, we find that the information conveyed by risk factor disclosures is reflected in systematic risk, idiosyncratic risk, information asymmetry, and firm value. Overall, our evidence supports the SEC's decision to mandate risk factor disclosures, as the disclosures appear to be firm-specific and useful to investors.